Sarah Ketterer (Trades, Portfolio) is the chief executive officer of Causeway Capital Management LLC, a firm that focuses on both fundamental analysis, which consists of understanding the financial statements of companies and their potential improvements, accompanied with quantative investing.
According to Ketterer, the firm is full of contrarian investors that like to go where others don't.
"It's one thing to buy when others are selling, but if you buy too early, your clients are unhappy," Ketterer expressed during an interview with Steve Forbes.
When a client expresses that he wants to pull out of a region, it acts as a green light for Ketterer and her team to go in heavily.
"Usually they've stumbled and that's what makes them a value stock. Something's gone wrong and it's typically temporary," Ketter said.
Ketterer's team consists of 12 portfolio manager analysts and four quantative specialist portfolio managers.
Causeway's stocks are screened by quantative colleagues. They are mainly looking for stocks with equity risk premium and earnings yield that exceeds a particular country's 10-year government bond yield by 200 basis point gap.
A few of Ketterer's most recent stock purchases include: Eli Lily and Co (LLY, Financial), Chevron Corp (CVX, Financial) and Synnex Corp (SNX, Financial).
Eli Lily and Co (LLY, Financial)
This chart shows revenue in relation to net income
Eli Lily and Co is a business that is focused in drug manufacturing, founded in Indianapolis, Indiana. The company also discovers, develops and sells products in two different business categories: human pharmaceutical products and animal health products.
Recent news: In mid-September, Eli Lily released a new injectible drug for diabetes, Trulicity, approved by the FDA. The drug is for adults that have Type 2 diabetes, which is the most common form. Weekly injections are said to improve blood sugar control.
Curent price of stock: $67.34
Down by: 0.5%
Why we think this is a good investment:
- The operating margin is expanding
What we think investors should be cautious of:
- Piotroski F-Score is at 2, which typically implies poor business operation
This chart shows revenue in relation to net income
Chevron Corp is focused on the exploration and production of oil, gas and geothermal energy industries. The company is also focused on marketing and transport, chemical manufacturing and selling, as well as power generation. Chevron is one of the largest oil companies in the world.
Recent news: Chevron, along with Exxon Mobil, which are the two largest oil companies, both reported strong quarterly earnings at the end of October. Although the price of oil has decreased, this did not affect either of the company's profit.
Current price of stock: $115.53
Up by: 0.13%
Why we think this is a good investment:
- The operating margin is expanding
- Dividend yield is close to 3-year high
- P/E ratio of 10.80 is close to 1-year low of 9.8
- P/B ratio of 1.42 is close to 10-year low of 1.34
What we think investors should be cautious of:
- The company has issued $15.9 billion of debt and continues to issue more
- Cash flow from operations is extremely deviant of net income, indicating that the company may not be receiving payment from customers
- The company's build asset is at 11.1% per year and the revenue growth rate is at 8.8% over a span of 5 years, indicating a decrease in efficiency
This chart shows eps in relation to revenue
Synnex Corp is an IT company that offers supply chain services to equipment manufacturers, software publishers and reseller customers.
Recent news: Concentrix Corporation, a subsidiary company of Synnex Corp, recently made a technology-use agreement with Eptica, a worldwide multichannel interaction software company. Concentrix is said to have a true passion for innovative technology and cares about its customers and their experiences, which is why Eptica chose to collaborate with the company.
Current price of stock: $69.88
Down by: 0.03%
Why we think this is a good investment:
- The company has shown predictable revenue and earnings growth
- The margin is continuously expanding
What we think investors should be cautious of:
- The Piotroski score is 3, indicating poor business operation
- Over the past three years, the company has issued over $482 million of debt.
- The company's build asset is growing faster than its revenue growth rate and has been doing so over the past five years
